Monetary Policy Review: April 2024 By HDFC Asset Management Co Ltd
The Monetary Policy Committee (MPC) decided to keep the policy rate and stance unchanged, with a majority vote of 5 to 1. Thus, repo rate was maintained at 6.5% and stance remained focussed on “withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth”. Consequently, SDF, MSF and CRR rates were also kept unchanged at 6.25%, 6.75% and 4.5% respectively. Same as last meeting in Feb’24, one of the external MPC member voted for reduction in repo rate by 25 bps and changing the stance to neutral.
In other measures announced, trading of sovereign green bonds on International Financial Services Centre (IFSC), improving ease of access to retail investors to invest in Gsecs via mobile application and permitting Small finance banks to deal in permissible interest rate derivatives could help in deepening of market.
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